Inspired Publishes Amended Q3 Report to Regain Compliance

Inspired Entertainment, a leading supplier of gambling content, technology, hardware and services, has published its financial report for the three months ended September 30, 2023. This belated publication highlights the company’s amended filings, in line with Inspired’s plan to regain its compliance.

Lorne Weil, Inspired’s executive chair, presented the results, highlighting the company’s performance during the period. He said that for the first half of 2023, the net impact to adjusted EBITDA from the restatement was effectively zero. He elaborated that the $1 million decrease in Q1 was offset by a $1 million increase in Q2.

The impact of the company’s adjusted EBITDA for FY 2022, meanwhile, was a decrease from $99.6 million to $99 million, or less than 1%. Adjusted EBITDA margin for Q3 was 27%, Weil added. Excluding Low Margin Gaming Hardware sales, the margin was 36%, compared to 37% in Q3 2022.

In Q3, Adjusted EBITDA increased from $15 million to $16.4 million. The company’s digital business generated 58% of adjusted EBITDA contribution, which reflects Inspired’s focus towards its higher margin, scalable digital business. Weil noted that the company is planning further investments.

Weil pointed out that Inspired expects Q4 EBITDA to be in line with consensus. He noted that the metric could have surpassed $2 million if not for a ransomware attack suffered by the company.

The Digital Segment Continued to Evolve

Weil explained that Inspired’s digital business third quarter results were led by the Interactive segment. He reported revenue and adjusted EBITDA increases of 28% and 55%, respectively.

Interactive results reflect another quarterly record as we continue to benefit from an increased footprint through new customer launches, the consistent deployment of new content and increased promotional activity through exclusive deals with tier-one customers as well as revenue growth from existing customers.

Lorne Weil, executive chair, Inspired Entertainment

The Virtual Sports segment, Inspired reported, generated $13.4 million of revenue, representing only a slight increase from Q3 2023. The decline was partially offset thanks to increased retail revenue, Weil said. Despite the temporary setback, he expressed trust in the NA and LATAM markets, saying that the Virtual Sports segment might soon experience a strong growth phase.

Inspired’s Land-Based Operations Show Promise

The company’s land-based operations, on the other hand, saw Inspired deploy its new Vantage cabinet across two of its largest licensed betting shop customers. This allowed the company to record another $22.7 million of low margin terminal sales. The pubs business saw Inspired deploy Vantage across 20% of its customer estate, resulting in revenue growth of roughly 20% per machine.

Weil concluded that Inspired remains in a good spot, as attested by its recent share buyback program that saw it repurchase $1.5 million of its stock.

Finally, Weil reaffirmed his trust in the company’s digital segment and added: “Combined with a resilient land-based business, our diversification and expansion ability reinforce our omni-channel strategy combining our high-margin, capital efficient digital businesses with our steady land-based businesses.”